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Colleges Are 'Undermining' Pell Grants, Report Finds

Pell Grants are designed to enable more low-income students to go to college, but a new report shows many colleges are using the federal aid to replace their own institutional grants and often not providing enough support to make attending affordable for many disadvantaged students.

Stephen Burd, a senior policy analyst at the New America Foundation, outlined how colleges' pursuit of prestige and revenue is hurting low-income students in a report, "Undermining Pell, Volume II," released Sept 17. The new report is an update to one out last May by Burd that chronicled how many colleges expect students to pay an amount that is equal to or more than their family's annual income, leaving many taking on large debt loads.

The new research finds the problem is only getting worse at private colleges, where the proportion of colleges charging low-income students an average net price of less than $10,000 has dropped in one year from 11 percent to 8 percent of schools. Those charging the same students a net price over $20,000 has increased from 22 percent to 26 percent of schools, the report found.

Also, the number of colleges at which Pell recipients make up more than 15 percent of the student body and the lowest-income students are charged a net price under $10,000 has dropped from 33 percent to 23 percent in one year, according to Burd's analysis.

At public institutions, changes this past year were mixed. The proportion that charged in-state students from low-income families more than $10,000 has grown from 34 percent to 45 percent of schools. While the average net prices at 63 public colleges rose above $10,000 in the past year, it dropped at 14 colleges.

A March report by the Education Writers Association and the Hechinger Report found the prices families actually pay for college has increased by a larger amount for low-income students than for wealthy ones in recent years.

The New America Foundation's website features an interactive tool to examine the data more closely in the "Undermining Pell" reports, which included an analysis of how 1,400 private and public colleges are serving students with Pell Grants.

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